Hindustan Petroleum Corp (HPCL) reported an decline in 88% profit to INR 631 crore for the July-September quarter as refining margins crumbled.

Shares of the state-owned fuel retailer fell 8% on Friday when the benchmark Sensex closed 0.8% lower. HPCL’s revenues for the quarter rose 5% year-on-year to INR 1,08,216 crore in the July-September quarter.

“The primary reasons for lower profit after tax are suppressed marketing margins on select petroleum products, reduced refining margins due to lower cracks and falling international crude and product prices,” the company said in a statement.

Average gross refining margin (GRM) for the second quarter was $3.1 per barrel, a sharp decline from $13.3 per barrel in the year-earlier period. The reduction in GRM is in line with the trend of international benchmark product cracks, HPCL said.

It recorded domestic sales volume growth of 5.6% during the quarter as against an average growth of 1.8% for state-run oil companies.

The overall physical progress at the greenfield refinery project at Rajasthan’s Barmer has exceeded 82%, the company said.

“As of 30th September 2024, the total commitments on the (Barmer) project are INR 70,872 crore and capital expenditure is INR 50,570 crore,” the statement said.

The crude oil pipelines, for both imported as well as for domestic crude oil to be used at Barmer refinery, have also achieved more than 94% completion, it added.